Invitation to tender – audit services – AIM

Job Title: Invitation to tender for audit services
Location: AIM
Closing date: 5:00 pm 25 March 2024

Purpose 

This information is designed to assist companies responding to an invitation to submit a tender proposal for providing statutory external audit services to the Association of Independent Museums (AIM) for the financial year ending 31 December 2024 and onwards. 

Background  

The Association of Independent Museums (AIM) was established in 1977. It is a charitable company limited by guarantee, charity no 1082215, company no 1350939. It currently has around 1200 members comprising independent museums, individuals and suppliers. It is one of the largest heritage representation bodies in the UK.   

The charitable objects that AIM was established for, updated in 2020, are: 

  • The advancement of the educational and cultural facilities for the public benefit throughout the United Kingdom, the Republic of Ireland, the Channel Islands, and the Isle of Man provided by independent museums, galleries, and heritage organisations.  In respect of this the Company defines independence as taking responsibility for your own decisions, being accountable for them, and for not being subject to another’s authority, nor dependent on another for your existence. 
  • In furtherance of the above objects but not further or otherwise the Company shall achieve these objects through advocacy, representing Members’ best interests, sharing, and promoting best practice, innovation, and acumen, creating networks and connections, raising and distributing grants, developing policy, supporting skills and workforce development, promotion, and by providing support and advice for all museums and heritage organisations.

As AIM looks ahead to our 50th anniversary in 2027 we are focusing on growing our services and membership to be an authoritative voice for small and independent museums in the UK and to provide ever more support to our membership community to run effective charitable businesses. We wish to focus on our partnerships, community, and voice. Over the coming year we will be exploring increasing our income through fundraising, which is likely to result in a greater proportion of our income being restricted funding from trusts and foundations for activities and programmes including but not limited to grants.  

AIM’s website at http://www.aim-museums.co.uk/ showcases its range of activities and services to members.  

Until 2013 AIM’s accounts were reviewed by an independent examiner when, in light of AIM’s growth and increased financial activity, an auditor was appointed.   

The most recent annual report and accounts (2022) can be downloaded via this link AIM-Annual-Report-2023-Signed.pdf (aim-museums.co.uk) In 2022 (the last full financial year that accounts are available for), AIM’s total income was just under £900,000, comprising £527k in unrestricted funds and £367k in restricted funds. Total expenditure was just under £1 million, comprising £536k in unrestricted funds and £448k in restricted funds. In early 2023 AIM secured a new £950k two-year grant scheme funded by the Department for Culture, Media and Sport, resulting in the 2023 budget comprising £1.8 million income and £1.4 million expenditure. At the end of 2022 AIM’s unrestricted reserves were £276k.  

AIM’s unrestricted funds come from subscriptions from our members (on a sliding scale dependent on visitor numbers) and income from advertising, sponsorship and fees for its annual conference.   

Since 1 April 2018 AIM has received unrestricted funding of £300k pa as an Arts Council England (ACE) Sector Support Organisation. AIM successfully reapplied for this funding last year and from 1 April 2023 to 31 March 2027 will receive £305,520 annually as an Investment Principles Support Organisation. This is a significant amount of our funding, supporting overheads and staff costs as well as activities and services, and comes with important regular financial and other reporting responsibilities in order to provide assurance that public funding is being spent effectively.  

AIM also holds restricted funds on behalf of third-party funders which are either earmarked for specific projects or for distribution in grant schemes to members. At present our third party funders, along with Arts Council England on behalf of the Department for Culture, Media and Sport, are the Welsh Government, the National Lottery Heritage Fund, the Pilgrim Trust and the Arts Scholars Charitable Trust.  

 Applicable Law  

The Annual Report and Accounts must be prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2015)- (Charities SORP (FRS 102)), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006. 

 Internal Financial Procedures  

AIM’s governing body is its Board of trustees, currently fourteen individuals who support the independent museum and heritage sector and have relevant skills to lead AIM. They meet five times a year. More about our Board members and staff can be found Contact Us – AIM – Association of Independent Museums (aim-museums.co.uk)  

AIM’s public and Lottery funding is a major aspect of our income, with plans to grow our income from third parties likely to be mostly philanthropic sources, and we wish to be able to demonstrate to these organisations that their funding is secure with AIM. We are therefore particularly interested in proposals that can evidence familiarity with auditing organisations spending a mix of earned income, public funding, and trusts and foundations.  

The key contact for AIM is the Director, Lisa Ollerhead. Other important AIM contacts are the Membership Administrator and Head of Communications (who oversee membership income and the membership database) and Grants Administrator.  

AIM currently contracts Excluserv http://www.excluserv.com for bookkeeping, accountancy and VAT services, including preparation of management accounts and SORP accounts.    

AIM will prepare the financial schedules and Notes to the Accounts.  

AIM will prepare the narrative elements of the Annual Report.  

AIM’s financial software is Xero accounting.   

AIM’s payroll services are currently contracted to Excluserv.  

AIM’s financial year runs from 1 January – 31 December and the AGM is held in June of each year.  

AIM is registered for VAT.  

AIM is based at the National Waterways Museum in Ellesmere Port, with most staff in the northwest, but we would expect the work including appearance at the Board meeting to be conducted remotely.  

The audit work is usually planned in the December with the year-end accounts becoming available from the bookkeepers in late February/early March and the audit itself being conducted in March. The audit for year ending 31 December 2023 is already underway and we are seeking to appoint this year with the first audit being carried out in early 2025 for financial year ending 31 December 2024.  

A draft annual report and accounts should be ready for review at the Board meeting in late April or early May. They will be presented for approval at the AGM, which is currently held during AIM’s annual national conference in June.  

AIM is currently considering changing our financial year to April-March, reflecting that many of our public and philanthropic funders work to this year. We would wish to work with our auditors both to make this change and to manage the implications, likely including carrying out the audit over late spring and summer moving our AGM to an online meeting later in the year. 

 Services Required  

The statutory audit services will include, but will not be limited to:  

  1. Planning, management and execution of the annual statutory audit of the Association of Independent Museums in accordance with applicable law and current accounting standards. 
  2. Review of the financial statements, accounting policies, disclosures and trustee/director reports in order to provide an audit opinion
  3. Report to the Trustees on the annual audit and financial statements, including personal attendance at meetings if appropriate. 
  4. Technical advice in specialist areas such as charity accounting, risk management and VAT. 

 

 Tender Process  

Interested parties should submit the following information by 5pm on Monday 25 March 2024.   

6.1 Company Details  

  1. Organisational structure, outlining capabilities relevant to AIM. 
  2. The address and contact details of the office that would be responsible for providing audit services. 
  3. Information on charity sector experience of clients comparable to AIM, specifying the proportion of the firm’s work that relates to charities.

6.2 Understanding of AIM  

  1. Demonstration of the nature of AIM’s business and structure and the key financial risks and issues likely to affect the organisation.

6.3 Human Resources  

  1. The partner and manager who will be assigned to the audit, including the extent of their involvement and relevant charity client experience. 
  2. Succession planning and steps to ensure staff continuity. 

 

6.4 Audit Approach  

  1. Explanation of audit strategy and how audit planning is undertaken. 
  2. Address audit scope and the consideration of materiality. 
  3. Control and co-ordination of the audit. 
  4. Reporting arrangements.

6.5 Fees  

  1. Quotation for the year end audit of the financial statements for 2023 (including VAT) (to note the auditor will not be required to carry out the audit for the year ending 2023, but is asked in order to provide a point of comparison for costs, recognising this quotation will not be binding to the audit in 2025 of year ending 2024). 
  2. Provide an analysis of hours by grade of staff involved on the audit with details of your current charge out rates. 
  3. Indicate the basis of charging expenses. 
  4. Basis for fees charged in future years. 

Tendering organisations should confirm ability to carry out the audit on both the current financial year (ends 31 December, AGM June) and after a potential change (ends 31 March, AGM later in the year).  

6.6 References  

Two references from previous clients that demonstrate practice excellence relevant to the services required by AIM.  

 Contracting Procedure  

The contract will be awarded on the most economically advantageous tender in terms of the following criteria:  

(i) Experience – 20% 

(ii) Price (value for money) – 15% 

(iii) Suitability of proposal – 50% 

(iv) Ability to meet timescales – 15% 

Time Plan  

Key datesMilestone
w/c 29 January 2024Tenders invited
5pm 25 March 2024Closing date for receipt of tender proposals
2 April 2024AIM Finance, Audit and Risk Committee review proposals and prepare recommendation to AIM Board
8 May 2024Firms advised of recommended appointment by AIM Board of preferred audit service provider
13 June 2024Recommendation to Annual General Meeting of AIM to appoint auditors

Tender Submission  

Electronic copies of the tender proposal in PDF format to be submitted no later than 5pm on 25 March 2024, labelled ‘Audit Tender Document’ in the subject header and emailed to:  

lisa.ollerhead@aim-museums.co.uk  

Confidentiality and Data Protection 

Tender proposals will be treated confidentially and not disclosed to any third party.   

The information that you supply as part of your tender proposal will be used in the selection of a statutory auditor for AIM and for no other purposes. All information will be stored securely with access only to those involved in dealing with your tender. Unless you are awarded the contract your information will be held for a maximum of 12 months and then destroyed.  

By submitting a tender proposal you are giving your consent to your data being stored and processed for the purposes of awarding this contract.  

Contact Details 

Any questions should be referred to Lisa Ollerhead, AIM Director, lisa.ollerhead@aim-museums.co.uk Please note Lisa is on annual leave 8 – 25 March inclusive so any queries should be sent before 8 March.